Bill · S. 3246· Senate(119-S-3246)
Service Members Tax Relief Act
- Introduced
- 11/20/2025
- Last activity
- 11/20/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Pete Ricketts
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
This bill is called the Service Members Tax Relief Act. It was introduced in the Senate on November 20, 2025. The bill aims to change the Internal Revenue Code of 1986. Its main goal is to exempt certain income earned by active or reserve service members from taxes. However, it explicitly states that pensions and retirement pay are not included as compensation for this tax exemption. The new tax rules would apply to income earned in taxable years beginning after the date the Act is enacted.
Yes· 3 of 7
Does this increase the pay, pensions or support veterans receive?+7
Provides a significant financial benefit to active and reserve service members by exempting their service income from taxes.
Would veterans be better off under this, taking everything together?+6
Positively impacts active and reserve service members by providing significant tax relief on their earned service income.
Does this cut taxes for middle-income families?+5
The bill exempts active and reserve service members' compensation from federal income tax, directly reducing tax burdens for many middle-class military personnel.
The opposite
Would retired people be better off under this?-2
Excludes retired service members from the tax exemption because retirement pay and pensions do not qualify as compensation under the bill.
Who it would affect, and how
Potential Positive Impacts for People
- Tax Exemption for Service Members: Section 2 adds a new section to the tax code that says gross income will not include compensation received by individuals for their service as active or reserve members of the Uniformed Services of the United States. This is a positive outcome because it could save these service members money on their taxes.
Potential Negative Impacts for People
- Exclusion of Retirement Pay: Section 2 specifies that the term compensation does not include any pension or retirement pay. This could be viewed as a burden or negative consequence because retired service members will still have to pay taxes on their retirement income instead of getting a break like active and reserve members.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Veterans+6Good For Low Income Households+4Good For Middle Aged+4Good For Middle Class Households+4Good For Young Adults+4Good For Retirees-2
- National Security And Foreign Policy
- Improves Veterans Benefits+7
- Economy And Finance
- Reduces Middle Class Taxes+5
- 11/20/2025
- Read twice and referred to the Committee on Finance.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.